Marks & Spencer fashion sales jump 11.5% as it "reshapes for growth"
Marks & Spencer has revealed a jump in sales of 9.6% in the year to 1 April 2023, with Clothing & Home up 11.5%, as retail giant said it was reshaping for growth. However profits dipped over the past year on the back of higher costs.
Total revenues for the year hit £11.93 billion (up from £10.9 billion), while profit before tax and adjusting items was £482 million (down from £523 million), however last year's profit figure was boosted by rates relief from the Covid era.
Clothing & Home sales hit £3.72 billion with the division delivering an operating profit of £323.8 million. Food sales were up 8.7% to £7.22 billion with an operating profit of £248 million.
Encouragingly store sales were up 14.9%, as shoppers returned to the high street in the wake of the pandemic, while online was up 4.8%. Marks & Spencer said it had noted a strong performance from Click & Collect.
The leadership at M&S hailed the performance as evidence of progress from the retailer’s turnaround plan, which has seen it shut dozens of its larger stores amid an overhaul of its store portfolio.
M&S also told shareholders it has witnessed a “good start” to the new financial year, despite an “uncertain” outlook for consumer spending.
Following on from the cost pressures of the past year the company said it expects to face over £50 million of energy cost rises and over £100 million in staff pay increases over the coming year, but stressed plans to offset this by its cost-cutting plan designed to secure a further £150 million a year.
M&S CEO Stuart Machin said: “One year in, our strategy to reshape M&S for growth has driven sustained trading momentum, with both businesses continuing to grow sales and market share.
“Our Food and Clothing & Home businesses invested in value to protect customers from the full force of inflation which, whilst impacting margin, was the right thing to do, as serving our customers well is the only route to delivering for our shareholders.”
Machin added: "The store rotation and renewal programme delivered strong sales uplifts and will accelerate this year, including the opening of five brand defining full-line stores in major cities. Our disciplined approach to capital allocation means we can invest for growth, while further reducing net debt and maintaining investment grade credit metrics, and we plan to resume dividend payments at our interim results."